Preview of the week (07Aug2023) - Will BABA fall?
Public Holidays
No public holidays for Hong Kong, the US & China in the coming week.
09 Aug 2023 (Wed) - Singapore celebrates National Day.
To my fellow Singaporeans, let us continue to pray for peace, progress and prosperity upon our land.
Economic Calendar (07Aug2023)
Economic Calendar of the week starting 07Aug2023
Notable Highlights
CPI - The consumer price index (CPI) data, an indicator of inflation will be revealed this coming week. Though PCE is the preferred Fed’s preferred indicator for inflation, this will still be part of Fed’s consideration for the coming interest rate decision.
PPI - The Producer Price Index (PPI) can be treated as a forward indicator of inflation. This is the “inflation” that affects producers which is usually passed on to the consumers. If the PPI trends lower, this can be seen as lesser inflation hitting the market. It is noted that the impact of this on the consumer is also dependent on the price elasticity of the products and services.
Jobless claims. Initial jobless claims will be announced on Thursday. This would form important data points for the Fed to decide on the next interest rate adjustment. This is part of the data consideration for the Fed in their coming interest rate decision.
Crude Oil Inventories can be seen as forward indicators of market demand and consumption. If the trend of excess inventories continues, this implies demand erosion that can lead to reduced production & weakening consumer spending. We have seen a record drawn down of the inventory previously that can be read as bullish. One report alone does not constitute a trend.
Earnings Calendar (07 Aug 2023) ~ is this the fall of BABA?
This is another big week of earnings for various sectors. Personally, there are a few companies of personal interest that include Tyson, Palantir, UPS, Rivian, Disney and BABA. Let us look at BABA in detail.
BABA’s performance
From the 10 years table above, BABA’s growth over the last 10 years has been impressive. However, the revenue has seen a drop and the operating profit has plateaued around USD$14.9B.
BABA’s price is lingering in the sub-100 region and has seen a 0.54% drop after a year.
For the coming earnings, the forecasted EPS and revenue of BABA (ADR) are 14.59 & 224.39B respectively. Will BABA fall or rise?
Market Outlook - 07 Aug 2023
1D chart of S&P500 dated 06Aug2023
Technical observations of the S&P500 1D chart:
The stochastic indicator is on a downtrend.
The MACD indicator is on a downtrend but has completed a top crossover. The indicator seems to be ranging sideways too.
Moving Averages (MA). Both MA50 & MA200 lines are on an uptrend. With the last candle being above both the MA50 line and MA200 lines, this can be interpreted as an uptrend in the mid-term and the long term.
Exponential Moving Averages (EMA). The lines are on an uptrend though EMA 8 & 13 have converged, implying a potential reversal of the current uptrend. For confirmation, I need all 3 EMA (8, 13 & 20) lines converge.
From the technical indicators above, there are a total of 7 (Buy), 12 (Sell) and 2 (Neutral). Investing recommends a “STRONG SELL” based on the technical indicators above (1D chart for S&P500).
My thoughts
I think that the Fitch downgrade has a short-term impact on the stock market but the technical indicators point to a downtrend in the coming days.
@TigerStars
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